I’m all over pensions, investments, life insurance and planning but things like car and home insurance aren’t really my niche. I recently had a good chat with someone who has just started working for a large car insurance company and have learnt a few important things:
- If you have an accident while drink driving over the limit your insurance won’t cover your vehicle or any injury. It will cover the third party, but your insurance company will seek to recover that cost from you!
- It is surprisingly easy for your car to be ‘written off’. Insurers adhere to a code of practice where your car is repaired to an ‘as new’ standard so they don’t just fill and paint bumps and scrapes, they have to replace doors and bumpers! As you can imagine this is very expensive and these days it can be hard to get hold of parts. Because of this, if your car is over about 6 years old and has a low market value they are more likely to just write it off instead of repairing it.
- Once your car has been written off your insurance is cancelled immediately. This is a pain if you’re relying on the policy to cover you driving other people’s cars with third-party insurance while yours is off the road.
- You rarely get enough paid out from a write-off to replace the vehicle with one you want.
- If you have a special vehicle you can arrange an ‘agreed valuation’ which is what the insurance company will pay out should it be written off, rather than arguing over the valuation after the event.
Action point- Be careful out there, and definitely don’t drink drive!